Traders are required to adhere to the following Risk Management Rules to safeguard our capital and support the success of our traders. We actively monitor each account for signs of gambling or reckless trading behavior, with a specific focus on the following situations:
Maximum Risk Per Trade: Traders must not risk more than 3% of their initial account balance per trade, ensuring that a triggered stop loss does not exceed this limit. Thus, if your stop loss is set higher than 3% of your initial account balance, you have breached the maximum risk per trade rule. This limit is crucial for effective risk management and capital protection. Please note that commissions are included in the maximum risk per trade calculation and can be viewed in your final trade P&L in Bybit’s P&L history.
Martingale Strategy: The use of the Martingale strategy is strictly prohibited. Martingale is a high-risk betting system that involves doubling the stake after each losing trade. This strategy can lead to substantial losses and goes against responsible trading practices.
Prohibition of Hedging Across Different Accounts: Traders are prohibited from hedging positions across two or more different accounts simultaneously. Hedging involves opening opposite positions with the intent to offset potential losses, which can result in decreased transparency and increased risk.
Profit Distribution Rule: No single trade should contribute more than 40% to the total profit generated by a trader. This rule aims to prevent excessive reliance on a single high-risk trade and encourages a diversified and responsible trading approach. This rule is valid during the evaluation and demo live phases only. However, when the trader is trading on a sub-account, this rule is not applicable.
Stop Loss Obligation: Stop loss orders are vital risk management tools in trading, designed to limit potential losses by automatically executing a trade when a predefined price level is reached. Traders are required to place a stop loss on every position to ensure proper risk management.
Accounts are subject to regular manual reviews, during which we assess for signs of gambling or an “all-or-nothing” mentality. In cases of extremely high risk, we retain the right to implement any of the following actions:
- Issuing a warning
- Removing account profits
- Adjusting the payout
- Temporarily reducing profit splits
- Rejecting withdrawal requests
- Terminating the account in full.